You just opened your preliminary title report and it reads like another language. If you are buying in The Village or the nearby hillsides of Laguna Beach, you want to know what matters, what can wait, and what might affect your plans. This guide breaks the report into simple parts, highlights coastal and hillside issues to watch, and gives you a clear checklist to move from confusion to confident action. Let’s dive in.
What a prelim actually is
A preliminary title report is the title company’s snapshot of who owns the property today, what recorded items affect it, and what the company will need before issuing a title policy at closing. It is not title insurance yet. Coverage does not begin until closing and after required items are satisfied. Think of it as a roadmap and a to-do list, not a final guarantee.
A prelim focuses on recorded information. It does not confirm physical facts you would learn from a survey or an inspection. It also does not replace permit research with the city or county. Use it to spot exceptions, ask questions, and plan follow-up steps with your agent and the title officer.
Where to start in your report
Schedule A: verify the basics
Schedule A shows the property address, legal description, and APN. Confirm these match the listing and county tax records. It also lists who currently holds title and who will be insured. Your vesting choice can affect future transfers, so make sure it is correct.
Schedule B, Part I: requirements to close
This section lists what must happen before the title company issues a policy. Common items include paying off existing loans or liens, providing affidavits, recording releases, and obtaining HOA estoppels. Flag anything that looks complex or time sensitive. These are the action items that can delay closing if ignored.
Schedule B, Part II: exceptions to coverage
Exceptions are the heart of the prelim. They show what the title policy will not cover unless removed or insured with an endorsement. You will often see taxes, easements, CC&Rs, rights of parties in possession, and matters that a survey would reveal. Review each exception with the title officer so you understand how it affects use, access, and future plans.
Exceptions you may see in The Village
Easements on coastal and hillside lots
An easement gives another party the right to use part of the property for a specific purpose. In The Village and hillside areas, common easements include utilities, drainage, and in some cases public access paths. Hillside parcels can include slope or lateral support easements for retaining walls or stabilization. Ask for the recorded document and any map exhibit so you can see the exact location and limits.
CC&Rs and HOA rules downtown
Condominiums near downtown typically have CC&Rs and HOA rules that govern use, design approvals, rentals, and parking. Some older hillside tracts also carry recorded restrictions even if there is no large HOA. Unpaid HOA assessments become liens that must be cleared in escrow. Request the HOA estoppel to confirm balances and check for pending special assessments.
Liens, taxes, and assessments
Prelims list recorded liens such as mortgages, mechanics’ liens, and judgments. These must be released or paid at closing. You may also see property tax status and special assessments. In Orange County, special districts or improvement bonds can appear, so confirm what they are and who pays them.
Encroachments and survey matters
Title reports usually do not show unrecorded encroachments. Older Laguna Beach parcels sometimes have fences, terraces, or additions that drift over boundaries. If the prelim includes survey-related exceptions or if lot lines feel tight, consider an ALTA/NSPS survey. A survey can also support endorsements that remove certain standard survey exceptions.
Coastal and bluff conditions
Some coastal properties carry recorded public access easements, conservation areas, or conditions tied to prior approvals. You may also see references to bluff setbacks or maintenance obligations for shoreline protection structures. If your prelim mentions public access, conservation, or coastal conditions, review the recorded documents and speak with city planning about practical limits before you remodel or build.
Rights-of-way and access
Hillside plats sometimes show dedicated but unimproved streets or narrow road easements. Clear, recorded access matters for daily use and for emergency services. If access looks uncertain, ask about an access endorsement and whether additional documentation is needed.
Mineral or subsurface rights
Older deeds sometimes reserve mineral rights. This is uncommon in local residential use and typically has little practical effect, but note it if it appears in your exceptions.
Local red flags to review
- Drainage or slope easements that limit grading or new structures.
- Public or coastal access easements in or near the lot.
- HOA liens or pending special assessments on downtown condos.
- Mechanics’ liens from recent improvements that need releases.
- Conflicting subdivision map references that suggest you need a survey.
- Narrow right-of-way or unclear recorded access on hillside streets.
Step-by-step review checklist
Confirm key details first
- Match the legal description, APN, and address to the listing and tax records.
- Read all exceptions in Schedule B, Part II.
- Note all requirements in Schedule B, Part I and who must act.
Ask your title officer and agent
- For each exception, request the recorded document and any attached map.
- Clarify which exceptions are standard for the neighborhood and which are unusual.
- Identify liens or judgments likely to delay closing and who will pay them.
- Ask whether endorsements or a survey can remove standard survey exceptions.
- For HOAs, obtain an estoppel with balances and any scheduled assessments.
Order follow-ups when needed
- ALTA/NSPS survey if boundaries or encroachments are unclear.
- City or Coastal review if the prelim references public access or conservation.
- Permit checks if additions look newer or unpermitted.
- Targeted endorsements such as access, survey, encroachment, or mechanic’s lien coverage if available.
Title insurance and helpful endorsements
A lender’s policy protects the lender. An owner’s policy protects your equity. In coastal and hillside areas, consider endorsements that fit the property’s risks.
Useful options to discuss with your title officer:
- Survey endorsement to remove survey-related exceptions when a survey is provided.
- Access endorsement to confirm legal access over recorded roads.
- Encroachment or overlap endorsements if improvements sit close to boundaries.
- Mechanic’s lien endorsements for added protection against undisclosed work.
Endorsements do not erase recorded easements or restrictions. They add specific coverage based on the documents you provide and the underwriter’s guidelines.
Timeline and who pays what
Your prelim is typically issued soon after escrow opens and will be updated if anything new records before closing. The title company will list requirements that must be satisfied to issue the policy. In many transactions, the borrower pays for the lender’s policy, while the owner’s policy is paid by the buyer or seller based on local custom. Confirm current Orange County custom with your agent. Surveys and most endorsements are usually buyer costs when the buyer requests them.
How I help you review
Buying in The Village or the surrounding hillsides often means balancing the charm of older parcels with modern requirements. I help you translate every item in your prelim, obtain the underlying documents, and coordinate with the title officer, HOA, and city as needed. Together we prioritize what must be cleared to close and what you can accept with confidence.
If you are weighing remodel plans or need to understand a coastal access reference, we will dig into the recorded instruments and get clear answers early. My role is to protect your interests with calm, fiduciary guidance so you can enjoy your new home without surprises.
Ready for a clear, local walkthrough of your report? Connect with Lisa Easton for a focused review and next steps tailored to your property.
FAQs
What is a preliminary title report?
- It is the title company’s statement of current ownership, recorded matters that affect the property, and the conditions required before issuing a title insurance policy.
Does a prelim guarantee clear title?
- No. It is not a policy. Coverage begins at closing after listed requirements are met, and it excludes the exceptions shown in the report.
How do exceptions affect me as a buyer?
- Exceptions are items the policy will not cover, such as easements, CC&Rs, and taxes. Review each one and decide whether to clear it, accept it, or seek an endorsement.
Should I order a survey in Laguna Beach?
- A survey is smart for narrow or hillside lots, unclear boundaries, or potential encroachments. It can also support endorsements that remove some standard survey exceptions.
What if my prelim shows a public access easement?
- Get the recorded document and map, then review the location and allowed uses. Discuss impacts on privacy or plans with your agent, title officer, and city planning before you proceed.
Who pays for title insurance and endorsements?
- The lender’s policy is usually paid by the borrower. The owner’s policy is paid by buyer or seller based on local custom. Endorsements and surveys are often buyer costs.
